When the time comes for a new-to-you car, there are plenty of options out there to consider. One of the first choices you must make is whether to buy new or used. In your buying decisions, stick to the old maxim: a penny saved is a penny earned. Used cars offer maximal savings, and if you miss the new car smell--well, there are air fresheners for that.
If you buy a new car, the moment you drive it away from the dealership it depreciates 20 to 30 percent. If you trade that car in three years after purchase, it could be worth up to 50 percent less than the price you paid for it. Ask yourself why you should be the one to suffer this huge value loss when there are better options available.
Buyers of used cars enjoy a much slower rate of depreciation on their purchases. For example, a three-year-old car will depreciate by less than 30 percent over the course of three years. If you buy a car that is two or three years old, it may still be under warrantee, but you will save thousands of dollars that come directly from depreciation. As an added benefit, the insurance and taxes on cars in this age range tend to be lower.
If you think a three-year-old car is outside your price range or if you are simply looking for an older model, you can breathe easier knowing that improvements in car manufacturing have led to increased consumer satisfaction for cars five years and older. Thus, cars from earlier in the 2000s still come with extra features and high safety standards.
Are you ready for an auto change or perhaps simply tired of taking the bus? Either way, when you go on the hunt for a new-to-you vehicle, don't take a wallop to the wallet. Used cars are your most affordable options, period.
